European wood furniture sector still globally significant in driving design, production innovation, with exports rising notably to Russia, North America, China, Middle East, led by German, Italian, Polish manufacturers; imports of wood furniture declining
February 28, 2014
(International Tropical Timber Organization (ITTO))
– The recession in Europe has created many challenges for the European wood furniture sector. However the sector remains globally significant as a driver of design and production innovation.
There are also signs that the international competitiveness of the European furniture sector is improving.
The charts below suggest a significant change in Europe‟s position in the global market for wood furniture. Chart 1 shows the 3 month rolling average value of EU imports between the start of 2011 and November 2013.
Chart 2 below shows equivalent data on EU exports during the same period.
The moving average is used to smooth out short-term fluctuations, which are strongly influenced by factors like vacations or shipping delays, so that the longer-term trend becomes clearer.
Trade statistics and anecdotal reports suggest that the level of EU consumption and internal trade in wood furniture have been static at a low level since 2009 when there was a steep decline during the financial crises.
While external trade forms only a small part of the EU furniture sector, it is becoming much more relevant to European furniture manufacturers. During the recession, manufacturers have become more focused on improving competitiveness relative to manufacturers in other countries, particularly China.
With consumption static in domestic markets, European furniture companies are seeking to increase sales in other parts of the world.
This more outward looking strategy seems to be working for EU manufacturers. Exports of wood furniture are rising, particularly to Russia, North America, China, and the Middle East.
The rise in exports is being led by manufacturers in Italy, Germany and Poland (see Table 1). Meanwhile EU imports of wood furniture have been falling, a trend which strengthened in 2013 and affected all the main external suppliers including China, Viet Nam, Indonesia, Malaysia and Turkey (see Table 2).
Overall these trends suggest a revival in the relative global competitiveness of European wood furniture manufacturers over the last 3 years.
EU imports of wood furniture have been falling over the last 3 years (Chart 1) while exports have been rising (Chart 2).
At the start of 2011, EU net trade in wood furniture was close to zero, with both imports and exports averaging close to €500 million per month. However, by the end of 2013, the EU had a trade surplus in wood furniture of around €350 million per month.
Average monthly imports of wood furniture into the EU had fallen to €350 million while exports had risen to just over €700 million per month.
These figures should be put into perspective. EU external trade in wood furniture is relatively small compared to total consumption, which is about €50 billion per year (or €4200 million per month). There is much reliance on domestic manufacturers.
Only about one quarter of wood furniture consumed in EU countries ever crosses a national boundary. Total internal trade in wood furniture between EU countries averages around €1200 million per month.
The source of this article is the ITTO Tropical Timber Market (TTM) Report February 16-28, 2014, citing market information provided by the Chinese Forest Products Index Mechanism (FPI). This item is an extract of a major report on the European furniture industry and tables have been removed. To see the full ITTO report, go to: http://www.itto.int/mis_download/